Voluntary price discrimination, Columbia solar power edition

From the local Columbia Tribune:

The city bought 10 kilowatts of energy produced by the solar panels, divided it into 140 blocks of purchasable power and, for an annual cost of $48 per 100 kilowatt-hour block, offered electric utility customers the chance to buy a piece of pure green power.

“It’s a creative way to provide solar power to the people who want it without making the rest of the city pay for it,” interim Water and Light Director Mike Schmitz said.

Ninety customers bought all the available blocks by early 2009, Schmitz said. With the success of the program, the city will soon more than double its available solar power. Quaker Oats and retailer Bright City Lights have entered a contract that will result in an additional 15 kilowatts of solar power available to customers by summer.

Schmitz said improvements in solar technology have resulted in lower costs, a savings that will be passed on to customers. The city now buys solar output for 42 cents/kwh. Quaker Oats will be able to sell the next batch of solar power at 25 cents/kwh and Bright City Lights at 37 cents/kwh.

The new blended cost will be $40 for a 100 kwh block per year. By comparison, the regular rate for electricity through the city is about $9 per 100 kwh block, Schmitz said. Solar One costs are added to a user’s regular utility bill.

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